Bank of America to charge monthly fee to debit card users • Hacker News Board

Re: Bank of America to charge monthly fee to debit card users

#121

Post by JoshTriplett » Fri, Sep 30, 2011, 9:12 AM UTC

goodweeds wrote: post #116

JoshTriplett wrote: post #114

Earlier quoted context omitted.

Blacklisting people who bounce checks seems a lot more reasonable than many other banking practices. Don't bounce checks; you're committing a form of fraud, providing a promise to pay money you don't have. I see nothing wrong with refusing to do business with people who regularly commit fraud.

Wow. I was in chexsystems for seven years. My fraud was that two automated payments to PG&E and Speakeasy bounced. Why did they bounce? A woman in a volvo ran a red-light while I was commuting to my stupid dot-com job, causing me to spend a month in the hospital, half of that in and out of a coma. I had no friends or family nearby to visit me, let alone to tend to my finances while I was incapacitated. I'm an enginee…

There's a reason I said "regularly"; blacklisting someone who bounced one check seems excessively harsh. And I also consider it entirely unreasonable for any bank to refuse to cash their own checks, under any circumstances; I haven't run into such a bank but I can easily believe that they exist.

In any case, those sounds like two quite painful tales. There's a reason I don't set up automatic payments for anything (I prefer manually using online bill pay each time).

Re: Bank of America to charge monthly fee to debit card users

#122

Post by Rickasaurus » Fri, Sep 30, 2011, 10:08 AM UTC

ghaff wrote: post #94

Jarred wrote: post #91

Maybe it's because I don't buy much stuff, but I never understood the point of using credit for small purchases like getting a cup of coffee. I don't understand why people would use cash for that either (unless the coffee shop only takes cash/ charges more for debit). The same goes for checks. Could someone explain it to me?

I don't use debit. Pay off the credit every month. Get rewards points for it. Just no reason to use an additional separate card.

I have two cash reward cards and use one until I max out the points (%2) and switch to the other for the rest of the year. It's like a free $300 bucks a year :).

Re: Bank of America to charge monthly fee to debit card users

#123

Post by quintinsykes » Fri, Sep 30, 2011, 1:23 PM UTC

cube13 wrote: post #113

quintinsykes wrote: post #80

Earlier quoted context omitted.

The bank likely won't care if you use your card with a PIN ("PIN debit") or with a signature ("Signature debit"), which you refer to as "processed as credit". Either way, they still know it's your debit card that was used even though PIN and Signature debit transactions arrive at the bank through separate networks, so you'll probably get hosed with the fee unless you're in one of their "premium" accounts. Community b…

>The bank likely won't care if you use your card with a PIN ("PIN debit") or with a signature ("Signature debit"), which you refer to as "processed as credit". Mine does. They have a $1.50 charge whenever I use my PIN for non-ATM transactions. If I sign, there is no fee. It's been this way for the last 10 years I've had a debit/checking line with them.

I was speaking in terms of charging the $5/month fee. Pre-Durbin amendment there was a much wider gap between PIN and Signature debit revenue which is why the bank encouraged you to use Signature debit by surcharging you for using PIN debit.

Re: Bank of America to charge monthly fee to debit card users

#124

Post by quintinsykes » Fri, Sep 30, 2011, 1:27 PM UTC

blhack wrote: post #87

quintinsykes wrote: post #80

Earlier quoted context omitted.

The bank likely won't care if you use your card with a PIN ("PIN debit") or with a signature ("Signature debit"), which you refer to as "processed as credit". Either way, they still know it's your debit card that was used even though PIN and Signature debit transactions arrive at the bank through separate networks, so you'll probably get hosed with the fee unless you're in one of their "premium" accounts. Community b…

I disagree. The fee structure for "credit" purchases is different than that for "debit" purchases. It's in the interest of VISA to have me run the transaction as "credit". Would it surprise you if there was cooperation between BoA and VISA (or any other CC provider) to encourage the use of this? The $5/mo charge just encourages it even further.

You're absolutely right, the structure is different for Signature and PIN debit. Pre-Durbin there was a large gap between Signature and PIN debit interchange income and banks wanted you to use Signature debit for that reason.

With Durbin rules implemented that gap has narrowed and now the bank wants you to use an actual Credit Card vs. a Signature Debit transaction because they will make more interchange income off of it.

Re: Bank of America to charge monthly fee to debit card users

#125

Post by jcampbell1 » Fri, Sep 30, 2011, 2:29 PM UTC

nitrogen wrote: post #120

jcampbell1 wrote: post #56

Earlier quoted context omitted.

If you have high balances, you should consider "bank of internet". The name sounds like a joke, but they are similar to Ally in terms of services, but offer money market rates on the checking account. I use them, and don't need a savings/money market account, so it really simplifies things. They also don't charge foreign exchange fees, and their method for computing atm fees is the amount mod $5. When I was living in…

amount mod $5 How does that work at ATMs that only give out $20s? n 20 mod 5 is always zero. Unless, of course, "amount" here refers to the withdrawal amount plus* the ATM owner's fee?

Yes. The bank doesn't actually know what the ATM fees are. They just see cash withdrawal for 102. Some ATMs send two transactions, but many just bundle it as one transaction.

Re: Bank of America to charge monthly fee to debit card users

#126

Post by illumin8 » Fri, Sep 30, 2011, 2:58 PM UTC

kgermino wrote: post #83

baddox wrote: post #69

Earlier quoted context omitted.

Is that true for debit transactions? I always thought that credit card purchases cost the retailer money, which went to the credit company and/or rewards programs and/or banks, but that debit transactions cost the retailer nothing but cost the bank.

Debit transactions do cost the merchants, just not nearly as much. I think it's on the order of a transaction fee + .5% for debit vs transaction fee +3-4% for credit.

Right, they are still making money off of every transaction. It seems ridiculous to discourage debit card use. They are just greedy and want to charge both customers and merchants for essentially being a middle man and adding little value to the transaction.

Re: Bank of America to charge monthly fee to debit card users

#127

Post by throwawayday » Fri, Sep 30, 2011, 3:23 PM UTC

palish wrote: post #28

natesm wrote: post #17

Well, I'm switching (I don't have a credit card). What is a good alternative? I know everyone loves USAA, but none of my family has any relation to the military. BoA is "great" because it is everywhere , is there actually anything as wide spread in the (northeast) US?

PNC bank is fucking awesome. I'm not creative enough to think up enough good things to say about it: they just rock. PNC has a great website, the people are great (at least at my local PNC), they're very professional, and they're pretty smug about being the only bank left that has "free checking". http://www.pnc.com They even refunded me the $17 they charged for a box of checks. (I had gone in and asked for a truly-f…

Jesus, dude - that's enough info to start hacking someone's life in that png - be sure to blur the email and last numbers of the account before you use a public link.

Re: Bank of America to charge monthly fee to debit card users

#128

Post by tdfx » Fri, Sep 30, 2011, 3:33 PM UTC

JoshTriplett wrote: post #114

goodweeds wrote: post #72

Earlier quoted context omitted.

If you want to research a foul way of doing business, read up on Chexsystems and the collusion of major banks with national check-cashing firms. 20 years ago a consortium of bankers got together and essentially said, "if we build a credit-report system for bounced checks, we can limit our liabilities from poor people and make them give us 3-5% of their income by blacklisting them from all the nation's banks".

Blacklisting people who bounce checks seems a lot more reasonable than many other banking practices. Don't bounce checks; you're committing a form of fraud, providing a promise to pay money you don't have. I see nothing wrong with refusing to do business with people who regularly commit fraud.

This is used to trap poor people. Joe Anonymous accidentally miscalculates the available balance of his checking account and makes a debit card purchase of gum for $0.99. His account balance is now -$0.23. PNC hits him with an overdraft fee of $25, and an additional daily overdraft fee each day until Friday (payday), bringing his balance into the negative by hundreds of dollars. Joe then has to choose between paying his rent and bringing his account current at PNC. After a month or so, PNC blacklists him and he can't open a bank account anywhere.

Not fraud as far as I can see. At least not on Joe's part.

Re: Bank of America to charge monthly fee to debit card users

#129

Post by Qo » Fri, Sep 30, 2011, 4:15 PM UTC

fungi wrote: post #43

untog wrote: post #4

I think the thing that really annoys me about these kind of moves is that they're clearly targeting the less fortunate out there. If I want to avoid the $5 that's easy- I'll just switch to my credit card. But people who don't have enough credit to get a credit card now get punished twice. I read a fascinating passage in The Big Short (an excellent book on the financial crisis by Michael Lewis) that told the story of…

have relatives at another evil bank in another western country. the way they tell it is that the bank really doesn't want the less fortunate out there as customers. if they could figure out a way to drop them without the public backlash they would.

This makes sense to me. Revenues scale with deposits, but many expenses scale with number of customers. Below a certain balance, the bank actually loses money on each additional checking account - better for them if you just go somewhere else. Also, the less money you have in your account, the less certain they can be of the maturity of the loan you've made them. Given they can basically borrow from the fed for free, why would they want your money?

Re: Bank of America to charge monthly fee to debit card users

#130

Post by [deleted] » Fri, Sep 30, 2011, 5:10 PM UTC

laaph wrote: post #115

patrickc wrote: post #106

Earlier quoted context omitted.

Yes. Google walmart "moving pennies" and click on the first result

Please don't use google as a reference. Please, when you want to make a reference, use anything else. The first two results are to hacker news (this page!) and after that the results are to pages about penny stocks. http://www.google.dk/search?q=walmart%20%22moving%20pennies%... I know my google-fu is worthless but I can at least follow directions, and it still comes up with nothing.

[deleted]